According to the latest data from the Croatian Bureau of Statistics (DZS), the registered unemployment rate stood at 4.1% in August 2025. Meanwhile, average net monthly earnings in July amounted to EUR 1,437, representing a real decrease of 0.9% MoM but a 5.0% increase YoY.

Last Friday, DZS released its August 2025 labor market and July 2025 monthly earnings reports. The number of employed persons totaled 1.77 million, a slight monthly decline of 0.1%, but still an annual increase of 0.3%. Over the first eight months of 2025, compared to the same period in 2024, total employment rose by 1.1%.

Taking into account both employed and unemployed persons, the registered unemployment rate of 4.1% in August represents a 0.7 p.p. decrease compared to August 2024.

Total persons in employment & unemployment rate (Jan 2019 – Aug 2025)

Source: DZS, InterCapital Research

Turning to wages, average net monthly earnings in July 2025 amounted to EUR 1,437, down 0.9% MoM in real terms, but up 5.0% YoY. At the same time, average gross monthly earnings reached EUR 2,000, a 0.8% real monthly decrease but a 5.5% annual increase.

For the first seven months of 2025, net earnings accounted for 72.0% of gross earnings, down 0.5 p.p. compared to the same period last year, and 0.4 p.p. below the full-year 2024 average. The decline is even more pronounced relative to the pandemic period, when temporary tax relief measures lifted this ratio to 74.3% in 2021.

Average monthly gross and net earnings (Jan 2019 – Jul 2025, EUR)

Source: DZS, InterCapital Research

Meanwhile, median net wages stood at EUR 1,249 in July, recording a 1.3% monthly increase and a notable 10.5% annual rise. This suggests that wages in lower-paid occupations grew more robustly than those in higher-paid positions, supported by the government’s minimum wage policy but also reflecting broader improvements in living standards and productivity.

Median monthly net earnings (Jan 2019 – Jul 2025, EUR)

Source: DZS, InterCapital Research

In summary, the government is right to highlight record-high living standards, robust employment, and the overall strength of the economy, despite the frequent media panic. However, structural vulnerabilities remain. Croatia’s heavy dependence on tourism, the oversized public sector, and continued increases in government spending (even during an already expansionary phase) are weighing on productivity growth. Moreover, a procyclical fiscal stance risks fueling inflationary pressures, which are already elevated due to a mix of external and domestic factors, including EU fund inflows, taxes, global trade dynamics, war in Ukraine, etc.